A Beta Coefficient of 0 Represents an Asset That ________

question 133

Multiple Choice

A beta coefficient of 0 represents an asset that ________.

• A)has an expected return greater than the market portfolio
• B)has the same expected return as the market portfolio
• C)has returns that do not fluctuate at all
• D)has an expected return equal to the risk-free rate

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Definitions:

Compounded Quarterly

Interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan on a quarterly basis.

Loan

A sum of money that is borrowed, usually from a financial institution or individual, which is expected to be paid back with interest.

Payments

Transactions made by individuals or entities to fulfill obligations or to purchase goods and services.

Present Value

The immediate valuation of an upcoming sum of money or series of cash transactions, based on a given rate of return.